Treasury Secretary Bessent pledges to recover stolen funds and prosecute fraudsters in Minnesota’s “egregious” welfare scam, with investigations in other states.
MINNEAPOLIS: US Treasury Secretary Scott Bessent has underscored the government’s commitment to recovering funds stolen in a major social services fraud scheme in Minnesota.
Bessent said the Treasury would prosecute those responsible and investigate similar fraud in other states.
“Minnesota is ground zero for what may be the most egregious welfare scam in our nation’s history to date,” he said in prepared remarks for the Economic Club of Minnesota.
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He alleged billions of dollars intended for needy families, senior housing, and children’s services were diverted under Governor Tim Walz.
“I am here this week to signal the US Treasury’s unwavering commitment to recovering stolen funds, prosecuting fraudulent criminals, preventing scandals like this from ever happening again, and investigating similar schemes state by state,” Bessent added.
Governor Tim Walz, a Democrat and 2024 vice presidential candidate, recently announced he will not seek a third term.
He stated he would instead focus on the state welfare fraud allegations that have become a political crisis.
The Trump administration has singled out Walz and Minnesota over fraud allegations dating to 2020.
The allegations involve some nonprofit groups that administer state childcare and social services programs backed by federal funding.
At least 56 people have pleaded guilty since federal prosecutors began bringing charges in 2022.
Walz has called the fraud scandal a crisis but criticised former President Trump and other Republicans for “bad-faith attacks.”
Bessent last month said Treasury was boosting financial reporting requirements for money services businesses to help track cash flows.
He said the Minnesota fraud has cost taxpayers hundreds of millions of dollars.
This includes money sent to Somalia through money services businesses rather than formal banks. – Reuters
